THE country's biggest transport company, Toll Holdings, has thrown its support behind a federal government-sponsored freight terminal that is to be partly funded in tomorrow's budget.

The federal opposition and business groups have fiercely criticised the government's proposal for a large terminal at Moorebank and instead support a rival plan by a consortium led by Chris Corrigan's Qube Logistics to build a terminal on a separate site across the road.

The Opposition Leader, Tony Abbott, said the government's proposal was "another victory for Labor's born-again socialists". The Sydney Business Chamber's executive director, Patricia Forsythe, said it would be "absurd" to spend taxpayers' money when a freight terminal could be entirely funded by the private sector.

The government has argued that because its proposal is for a larger site - 220 hectares compared to 90 hectares - it is better suited to a once-in-a-generation terminal to move freight from trucks to trains. It has said it was not proposing to run the terminal, instead getting private firms to compete for the right to run it. These arguments have won Toll's support.

''The proposal … provides the most efficient outcome for the country," Toll's general manager of corporate affairs, Andrew Ethell, said. "The 220-hectare site is more able to provide the growth the Australian economy will need, given the projections for freight growth in the decades to come.

"The government's project provides users with confidence that a competitive process has produced the best outcomes.

Advertisement

''Under a private sector model, they build it and decide the terms of use."

Labor's other major transport policy to be unveiled in tomorrow's budget - $3.6 billion for the Pacific Highway, provided funding is matched by the state government - is expected to trigger another war of words.

A spokesman for the NSW Roads Minister, Duncan Gay, said federal Labor should honour the deal it struck with the Labor state government, in which it paid 80 per cent of the cost of the highway's upgrade.

"By walking away from that deal they are reducing their contribution by $2.31 billion, which will put the 2016 deadline at risk," the spokesman said.